Feds Charge Union County Auto Dealer In $2M Fraud Scheme

A Union County car dealer has been charged after authorities say he allegedly defrauded 140 Russian customers of more than $2 million.

Sergey Kapustin, 47, of Warminster, Pa. was arrested Thursday by special agents with the FBI and charged with one count of wire fraud and conspiring to commit wire fraud. He is scheduled to appear in federal court before U.S. Magistrate Judge Joseph A. Dickson in Newark, N.J.

Kapustin was the owner and president of Global Auto Group, Effect Auto Sales and G Auto Sales, located in Elizabeth. Global bought and sold used cars, typically high-end vehicles that were classified as “salvaged," according to documents filed in the case and statements made in court.

From January 2011 through December 2014, Kapustin operated at least one website in Russian offering luxury vehicles, including Mercedes and Lexus. The site listed the cars below market value and said they could be shipped to Finland for easy delivery to Russian citizens if they agreed to pay full price up front, according to information from U.S. Attorney Paul J. Fishman's office.

After the buyers wired the full price to Kapustin, he would make excuses for the delay in delivery, authorities said. Kapustin typically did not have possession of the car or title, Fishman's office said.

He would offer the victim a different, often inferior car, with added shipping and storage costs, authorities said. "The unsophisticated buyer, desperate to acquire something for money already spent, would oftentimes wire additional money to rescue the car from its storage; all to no avail," a news release from authorities said.

Kapustin, who is Russian, created the websites to make customers believe they were getting a “good deal” "from a fellow countryman who could be trusted," Fishman said in a news release.

The few cars that arrived in Finland were from salvage auctions and had been immersed in salt water and were inoperable, authorities said.

If convicted, Kapustin faces a maximum penalty of 20 years and a $250,000 fine.